Royal Bank of Scotland makes competing bid for NatWest

LONDON -- The Royal Bank of Scotland offered $43.2 billion for National Westminster Bank, already the target of an unfriendly offer by Bank of Scotland.

Royal Bank disclosed its bid today, three days after the NatWest board rejected a sweetened offer valued at about $42.3 billion from the Bank of Scotland.

NatWest said today its board rejected the Royal Bank offer as well.

Both bidders, two of Scotland's leading banks, said they remained hopeful of winning NatWest, the third largest bank in Britain.

The Royal Bank's offer, a mixture of cash and shares, valued NatWest at $25.79 per share at Friday's close, while the Bank of Scotland's latest offer was $25.23 a share including a special dividend.

"We remain confident," Royal Bank of Scotland spokesman David Appleton said. "We believe it is a very fair offer."

The Bank of Scotland's spokesman, Alex Padgett, said it was "quite clear they (NatWest) are dead in the water, and what they are trying to do is to extract the maximum value they can."

"Our offer is still there and, over the next few weeks, the shareholders of NatWest will decide themselves who they believe has the capacity to deliver what they are looking for," he said.

The Royal Bank said it would retain the name NatWest and make room for some NatWest managers if its bid were successful.

The Royal Bank, whose largest shareholder is a Spanish bank, Banco Santander Central Hispano, would hold 37.8 percent of the proposed combined group, with NatWest shareholders controlling the remaining 62.2 percent.

NatWest, battling to cut costs and retain its independence, has already pledged to cut 15,000 jobs. The Royal Bank said 18,000 jobs would go under its plan.